Moody's lowers SuperMedia

Moody's Investors Service said it changed SuperMedia Inc.'s probability of default rating to Ca/LD (limited default) from Caa2 following the company's voluntary prepayment of $235 million of par value debt for $117 million in cash.

The revision reflects a view that the transaction constitutes a distressed exchange.

The outlook remains negative.

The company's corporate family rating of Caa1 is unchanged, along with its $1.9 billion term loan rating of Caa1 (LGD 3, 34%) and speculative-grade liquidity rating of SGL 2.

The ratings reflect the declining profile of the directory publishing business and the challenges associated with transitioning the business away from a reliance on print advertising, Moody's said.

Continued weakness in ad sales relative to spending in other print-based channels and the overall advertising market suggests that the cyclical recovery in client advertising spending is not stabilizing revenue in the directory industry, the agency said.

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